Partnerships Flashcards
(30 cards)
General Partnership
It is an association of two or more persons that carry on as co-owners as a business for profit.
Association
Infers voluntarily getting together
Persons
Can have both natural and other type of persons that are recognized as legal entities.
Co-owners
Infers they are going to be working together with more than less equal rights
For profit
the intention of making a profit
Organizations that do not fall under Partnership
charity, scientific, political, and social organizations
Why does co-ownership of (real) property not establish a partnership?
- there needs to be the management of the property
- depends on what they do after.. if they do maintenance, repair, reconstruction, acquire tenants, draft leases –> yes
General Partnership Act
- The act does not have to be followed. Not a requirement
- It is a fallback position if partners have not discussed something
- very little they can agree to that can be considered to be illegal
Can a partnership be in writing?
Yes, but they don’t have to be. It can be oral, but certain aspects of oral partnership might not be unenforceable
General Partner
-have total personal liability
for the debt of the enterprise
- responsible for seed money
- manages business
- all general partners have the same status of liability. does not matter if one is more involved than the other
Silent Partner
Do not engage in day to day tasks of the business, but still holds the same responsibility
Partnership by estoppel
Person who is not technically a partner can be held liable as a general partner would be for ANY DEBTS AND DAMAGES OWED TO A THIRD PARTY (ex sales person for a partnership)
person who is important to the business( ex. employee with the partnership) will have positive benefits such as being valued and not being liable
Most important aspect of the partnership status
The sharing of profit
The sharing of profit
individual shares profit out of the business that is there. this can occur even if they never used the term partnership
Joint ventures
- specialed partnerships
- created by entities such as: two businesses, two corporations, two entities) to engage in a specific type of business or event
ex. building a building. put up office building
Can partnerships be created orally?
Yes. it is not illegal. the establishment of the agreement of the partners themselves is the problem
Why is it important to have a written partnership?
To record the agreement of what the individuals agreed to
Statute of Frauds
Certain contracts need to be in writing in order to be enforced in a court of law
not self-executed
does not mean the contract is null and void if there is a dispute between individuals when there is a circumstance where it needs to be in writing
Rules of Statute of Frauds
- the purchase or sell of real property must be in writing. okay if there was an oral contract as long as the agreement was fully consummated.
- contracts that are not capable of being completed within one year must be in writing
Partnership for a period of time
- agree to make a business, at the end of 5 years see if they want to continued.
a partner can get a restraining order for them not to work for a competitor.
if it is greater than a year, must be in writing
Partnership at will
no time limit
does not need to be in writing because they can be over it within a year
statue of fraud does not come in until something really happens
contract for purchase and sell of items other than real property
for example a sale oover $400 you can a receipt from the store. that is your contract. if item is defective you can go to court
vary in all states (the value)
prenuptial contracts
the intention of getting married. must be in writing
marital settlement agreement
parties are breaking up in marriage - must be in writing
